Coldwater Creek warns, shares sink

BarbaraC. Costanza

SANDPOINT, Idaho (CBS.MW) -- Shares of Coldwater Creek were trampled, down 33 percent, Friday morning, after the company provided targets for its third and fourth quarters.

The retailer
CWTR
said it expects third-quarter earnings in the range of 14 cents to 16 cents a share, while analysts had been forecasting a profit of 43 cents a share. In addition, sales will range from $139 million to $141 million. In the year-ago period, the company earned 64 cents a share on sales of $136.6 million.

"We continue to be directly impacted by the difficult sales environment in the retail industry and the overall effects of a tough economy on consumer confidence," said CEO Georgia Shonk-Simmons.

On a more positive note, the company said its inventory management continues to be very effective, and its inventories will be below its previously announced forecast of $80 million to $85 million for the quarter, compared with last year's inventory level of $85.5 million for the same quarter.

The company now anticipates fourth quarter sales to be between $104 million to $114 million, resulting in a loss of about $1.1 million to $1.5 million, or 10 cents to 15 cents a share. Analysts currently expect the company to earn 37 cents in the fourth quarter. In the year-ago period, the company posted sales of $139 million, with net income of $800,000, or 7 cents a share.

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